Interest rates in Japan fall, while those in the US remain unchanged.

a. Explain how the change in interest rates will directly affect domestic investment spending in Japan and therefore their AD/AS graph. (This is not asking about the FOREX graph or what will happen between nations. I just want to see if you know the relationship between interest rates and investment spending in a nation. Remember that investment spending and financial investment are two different things.)

b. Show and explain how the decrease in interest rates will affect the demand for the Japanese Yen and the supply of the US dollar. What will happen to the international value of the United States dollar and the Japanese Yen? (Make sure you use the concepts of supply and demand and financial investment in your explanation. This answer will also require you to draw 2 graphs)